Author: Roxanne Bradley
Published: January 20, 2026
Reading time: 1 minute
This article is 1 month old.
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You sell a vehicle and then receive a phone call asking for a refund, alleging that the person who entered into the agreement lacks mental capacity.
The details can vary widely, and each case needs to be reviewed individually.
If a person holds a Power of Attorney (for their parents, grandparents or a friend), this alone is not sufficient to suggest that the person lacks mental capacity.
Equally, a diagnosis of dementia or severe learning difficulties does not necessarily mean the person lacks mental capacity.
Only a medical professional can determine whether the person had or has the mental capacity to make an informed decision, and evidence of this (from their GP or another medical practitioner) can be requested before you provide your full response.
If medical evidence were provided conclusively confirming that the person lacked mental capacity at the time of entering into the contract, the contract would be void.
If you are facing a similar situation, our Lawgistics legal team can talk it through on the telephone helpline or handle it via our casework service.
The FCA provides further guidance which may be useful:
https://handbook.fca.org.uk/handbook/conc7/conc7s10?timeline=true.
